Ottawa, we have a problem

390px-Apollo13_-_SM_after_separationCanada’s education system is facing a potentially-serious problem. While many educational institutions believe, correctly in my view, that they have better alternatives to comply with the Copyright Act than licenses from Access Copyright, Access Copyright continues to push for rulings that would allow it to impose itself on educators and, essentially, collect a hefty “education tax”–as it will inevitably be called–from Canada’s educational institutions. Access Copyright believes, incorrectly in my view, that a tariff approved by the Copyright Board can and will become mandatory on any institution that may be held liable for making a single infringing copy of a single work from its (largely undefined) repertoire.

As Howard Knopf has explained in two recent posts, this theory underlies Access Copyright’s lawsuit against York University, as well as for its push to have the Board approve its proposed tariffs. Strangely, however, York’s defence does not appear to adequately contest  AC’s theory, and both AUCC and ACCC have withdrawn from the case at the Copyright Board, and so far have not signaled any intention to fight the notion of a mandatory tariff in any other way. The result is potentially a very dangerous situation for the education system, and it also puts the Board in an awkward situation, because its credibility depends primarily on the effective operation of an adversarial process, which has now all but collapsed. As Howard Knopf says “Even informed observers can be forgiven for being baffled.”

As a way out of this mess, I wrote a letter today to the Copyright Board requesting it exercise its power under the Federal Courts Act and make a reference to the Federal Court of Appeal, asking the Court to determine whether an approved tariff is mandatory, as Access Copyright believes, and would allow it to collect the royalties under the tariff from any educational institution that has made any single infringing copy of a work from its repertoire, or can the tariff only bind educational institutions who choose voluntary to be licensed under its terms.

I have also asked the Board to stay the current tariff proceedings until it decides whether to make the suggested reference, as well as until the question on reference is determined, if the Board decides to refer it.

My letter explains that the effect of the tariff—is it mandatory of not—is an important question of law that goes to the heart of the current proceedings. It has direct and immediate impact on the scope of Board’s jurisdiction, its mandate, and the procedures necessary for fulfilling it. The answer determines whether this case should proceed or may be effectively rendered moot; and if it proceeds, on what basis it can be approved, and on what grounds opposed, if opposing it is at all necessary.

I also stress that the need for such determination has become all the more apparent in light of the recent decision of ACCC to withdraw its participation in the current proceedings, and the AUCC earlier withdrawal in April of 2012. There has been no adequate explanation of the circumstances of the withdrawal of these institutional objectors, and curiously, although both organizations agreed to Model Licences, neither withdrawal resulted in a withdrawal of the tariff application.

I highlight the fact that without the active participation of these main institutional objectors, which represent virtually all of the post-secondary university and college administrations in Canada, the current hearing has become a de facto default proceeding. While the remaining objectors—essentially CIPPIC, a law school clinic, acting pro bono, and myself—can bring important perspectives that would have supplemented the perspectives of the institutions, the remaining objectors cannot possibly substitute for those institutions, not least because they cannot mount the resources that are necessary to address all the issues, and do not have access to the evidence that the institutions presumably have marshaled at very great expense.

Earlier this fall Access Copyright filed its Statement of Case and revised some of the terms of the original Proposed Tariff. As a result, the Proposed Tariff is essentially similar to the Model Licences, which Access Copyright had negotiated with AUCC and ACCC in 2012, before Parliament enacted the Copyright Modernization Act, and before the Supreme Court of Canada delivered its landmark fair dealing decisions on July 12, 2012. Those Model Licenses have been widely rejected by Canadian universities and colleges since then.

In fact, now that Model Licences are available for every institution that seeks a licence, AC’s belief that it can compel all institutions to pay it royalties and comply with the tariff seems to be the only reason for its interest to continue with the tariff approval proceedings, because if the tariff is not mandatory then there is nothing to be gained from approving it that cannot be gained by relying on the Model Licences.

Under these circumstances, if the Board certifies a tariff that is similar to these Model Licences, and if it is indeed mandatory as Access Copyright believes, the Board’s decision will be not only be controversial; it may also lack the credibility that would otherwise result from an adequately fought adversarial proceeding. So far, the Board has twice indicated, quite explicitly, that it agrees with AC’s theory, and did that on its own initiative, without ever inviting any of the parties to make any submission on this important but controversial question of law, as I point out in my letter. Therefore, if the Board proceeds with the current approval process, it is essential that the uncertainty about the effect of the tariff, which the Board is asked to approve, be resolved by the Federal Court of Appeal before the case proceeds, because the answer to that question affects the fundamental basis and almost every aspect of the Proposed Tariff.

I believe that clarifying this issue will benefit not only the parties involved in the current proceedings before the Board, but also those involved in related proceedings, and those who may be directly affected by them. A reference will not only preserve the Board’s credibility in this matter, but would also promote judicial economy and ensure that the Board and the parties to the current and related proceedings do not spend time and scarce resources on unnecessary proceedings.

Those interested in reading the entire letter can find it here.

Educational institutions that believe that making the suggested reference is a good idea, may be interested to know that under Paragraph 2 of the Copyright Board’s Model Directive on Procedure, anyone may comment in writing on any aspect of the proceedings. Therefore, even though Canada’s educational institutions are no longer represented before the Board, institutions that believe that a reference to the Federal Court of Appeal may be helpful, can still write to the Board to express their support. Here’s the Board Contact Us page.

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Posted in Antitrust / Competition Law, Blog, Copyright, Copyright Collectives, Stationers
One comment on “Ottawa, we have a problem
  1. Thank you for this post and for the referral request to the Copyright Board. As you point out the decision on the matter of the tariff could have a devastating effect on the educational system in Canada and therefore it is encumbent on all of us in the education sector to encourage the Board to proceed with the referral and stay the proceedings on the tariff.

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